Faculty & Research
An Examination of Internet Intermediaries and Hotel Loyalty Programs: How Will Guests Get their Points?
Vol 6 No 4
By: Bill Carroll Ph.D. and Judy Siguaw D.B.A.
Executive Summary: Competitive forces have made loyalty programs a key point of contention between hotel chains and the online intermediaries that sell hotel rooms using a merchant model. Hotel companies would prefer not to award points for the discounted rooms that they sell through the internet agencies. The intermediaries, on the other hand, would like to strengthen their position by offering hotel loyalty-program points. Ironically, although loyalty programs are costly for chains to operate, the cost of giving points is low for hotels, and the points have little intrinsic value for guests. Moreover, loyalty points are being used increasingly as a commodity that can be exchanged for goods or services not related to the hotel companies that issued them. Beyond that, an analysis of the game theory relating to the hotels' position suggests that hotels will eventually want to award points for internet-merchant sales, if only to minimize losses if a competitor does so. Finally, although one internet intermediary has experimented with setting up its own loyalty-point program, most seem to want to avoid taking on that expense.
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- An Examination of Internet Intermediaries and Hotel Loyalty Programs: How Will Guests Get their Points? By: Bill Carroll Ph.D. and Judy Siguaw D.B.A.
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Other Reports or Articles You May Find of Interest
- Quantifying Impact: The Effect of New Hotels and Brand Conversions on Revenues of Existing Hotels, by Arturs Kalnins, Ph.D.
- Low-price Guarantees: How Hotel Companies Can Get It Right, by Steven A. Carvell, Ph.D., and Daniel C. Quan, Ph.D.
- The Agglomeration Conundrum: How Co-location Helps Some Hotels and Hurts Others, by Cathy A. Enz, Ph.D., Linda Canina, Ph.D., and Jeffrey Harrison, Ph.D.
About Bill Carroll Ph.D.
Bill Carroll is a senior lecturer at the School of Hotel Administration. He teaches courses in economics, yield management, pricing and marketing distribution. He is also CEO of Marketing Economics, a consulting firm specializing in travel industry pricing, distribution, yield management and strategic planning. For over 25 years Carroll held a variety of senior positions in the travel industry. He was division vice president for Global Marketing Planning at Hertz, where he was responsible for global pricing, yield management, marketing information systems, and counter sales. He implemented the first decentralized yield management system in the car rental industry and a comprehensive Executive Information System that gained national recognition. Carroll later served as the global vice president for Reed Elsevier’s Travel Group, overseeing Travel Weekly, the Hotel and Travel Index, the Official Hotel Guide, and the Official Meetings and Facilities Guide. As CEO of Marketing Economics, Carroll works with clients across the travel industry including global distribution systems, hotel service companies and travel intermediaries. He also works closely with PhoCusWright, Inc. a travel industry research, consulting and publishing company. In collaboration with PhoCusWright, Carroll writes often on the evolution of hotel distribution and its impact on major chains and intermediaries. He has also written numerous articles on economics and travel industry topics. Prior to his work in the travel industry, Carroll was an assistant professor of Economics at Drew University. He also served as a member of the economics staff at AT where he was an expert witness before state regulatory bodies and prepared filings on pricing and forecasting with the Federal Communications Commission. In addition to his business and academic career, Carroll is a retired U.S. Army Lieutenant Colonel and was a university lacrosse coach for over 10 years. Carroll holds a B.A. degree in economics from Rutgers, an M.S. in labor studies from the University of Massachusetts, and a Ph.D. in economics from Penn State.
For more information visit http://www.hotelschool.cornell.edu/research/facultybios/faculty.html?id=149
